2017/2018 WAEC Financial Accounting Answer

Here is the 2017/2018 WAEC Financial Accounting Answer.

OBJ
1-10:    ABBCCBACCA
11-20:  CCACCACCAB
21-30:  CACBCCABBD
31-40:  BCCDADDBBD
41-50:  DBABAABBDC


3b) Materiality:
An important convention. As we can see from the application of accounting standards and accounting policies, the preparation of accounts involves a high degree of judgement. Where decisions are required about the appropriateness of a particular accounting judgement, the "materiality" convention suggests that this should only be an issue if the judgement is "significant" or "material" to a user of the accounts. The concept of "materiality" is an important issue for auditors of financial accounts.

2a).
A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts.

2b).
- to detect any errors that has occurred in the double entry accounting system

- it helps in the preparation of financial statements

2c).
1). Errors of Principle:
An error of principle is an error which violates the fundamentals of book-keeping. For instance, purchase of furniture is debited to Purchase Account, instead of Furniture Account; Wages paid for the erection of plant is debited to Wages Account, instead of Plant Account; the amount spent on extension of building is debited to Repairs Account instead of Building Account etc. These types of errors do not affect the total debits and total credits but affect the principle of book-keeping.

2). Errors of Omission:
If a transaction is completely omitted, there will be no effect on the Trial Balance. When a transaction goes completely unrecorded in both aspects or a transaction after being recorded in the books of primary entry is not at all posted in the ledger, the error is an error of omission. For instance, if a credit purchase is omitted to be recorded in the Purchase Day Book, then it will be omitted to be posted both in the Purchase Account and the Supplier’s Account. This error will not, however, result in the disagreement of Trial Balance.

3). Posting to Wrong Account:
Posting an item to wrong account, but on the correct side. For instance, if a purchase of Rs 200 from Ramu has been credited to Raman, instead of Ramu and this error will not affect the agreement of Trial Balance. Thus, Trial Balance will not detect such an error.

4). Error of Amounts in Original Book:
If an invoice for Rs 632 is entered in Sales Book as Rs 623, the Trial Balance will come out correctly, since the debit and credit have been recorded as Rs 623. The arithmetical accuracy is there, but in fact there is an error.


4a).
Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes.

4b).
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy

Reasons to prepare BRS;
1)To detect items not entered and errors in the cash book. To ensure that the cash book entries are complete.
2) Items missing from the cash book will not have been recorded in other ledger accounts and the business records will be unreliabl
3a) It is not a legally binding practice; rather, it is a generally accepted convention based on customs and designed to help accountants overcome practical problems that arise out of the preparation of financial statements.


6)
Tabulate
MANUFACTURING TRADING PROFIT AND LOSS A/C FOR THE YEAR END 31/12/2014
DEBIT SIDE:(Le)
Stock:56000
Purchases:150000
=206000
Add carriage inwards:7500
=213500
Add direct expenses:11400
=224900
Less closing stock:40000
=184900
Wages(16500)
Add acrrued(4000)
=20500

Prime cost:205400
Overheads Exp:
fuel:15000
Dept. Equip:12000
=27000
Add WIP @start:60000
=87000
Less WIP @ end:64000
=23000

less Gross profit on manufactured goods:22840
Market value=251240
Stock F.G:80000
Add Market value:251240
=331240
Less stock F.G:72000
=259240
240760
=500000
Carriage out:7600
Office expenses:3800
Salaries:19200
Net profit:233000
=263600
CREDIT SIDE:(Le)
Market value:21240
=251240
Sales:500000
=500000
G.p b/d:240760
G.P on manufactured:22840
=263600


5a)
tabulate
journal entries
details

i)suspens A/c
salako’s A/C
being an omission in salako’s A/C
DR(&) 1,000
CR(&) 1,000

ii)suspense A/C
sale A/C
being an undercast in the sales A/C
DR(&) 560
CR(&) 560

iii)Return outward A/C
suspense A/C
being overstatement in the account
DR(&) 140
CR(&) 140

iv)suspense A/C
damilola’s A/C
being omission in the account
DR(&) 410
CR(&) 410

v)supplier’s A/C
suspense A/C
being Wrong figure in the supplier account
DR(&) 180
CR(&) 180

vi)suspense A/C
discount allowed
being overstatement
DR(&) 310
CR(&) 310

vii)discount received A/C
suspense A/C
being an overstatement
DR(&) 400
CR(&) 400

5b)
tabulate
suspense A/C
salako 1000 $
sale 560
damilola 410
discount allowed 310/2,280
balance % 1,560

tabulate
return outward $140
supplier 180
discount allowed 410
balance % 1560/2,280


1a)
A source document is the original record containing the details to substantiate a transaction entered in an accounting system.

1b)
i)Dispatch Note
ii)Receipt
iii)Invoice
iv)Credit Note
v)Debit Note
vi)Purchase Order.

1c)
i)to record all the cash receipts and payments.
ii)to record all the credit purchases
iii)to record all the credit sales keep refreshing.




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